Variable Annuities

Why I don’t recommend them..Two BIG Reasons Retirees Should AVOID Variable Annuities:

There are two big reasons retirees should avoid Variable Annuities, (we don’t let our firm sell or recommend them ever!)

Reason #1: Variable Annuities are subject to stock market losses. Any vehicle that’s subject to stock market losses is a dangerous pursuit for a retiree. If your goal is …growth along with preservation there are reliable (in fact, guaranteed income) vehicles available to achieve this goal. Variable Annuities simply risk too much.

Reason #2: Non stop annual fees of 3%, 4%, or more. With fees like these, it takes much bigger gains to bring an account back to it’s previous level after losses are sustained. That means that a simple 5% loss in the market combined with 3 or 4% fees requires that a market gain of 13% must occur in order to right your ship. Again, it’s simply much too risky.

If your variable annuities fees are 3% and the gross return for a year is 12%, you’ll net an increase in account value of 9%. But if the gross return for a year is NEGATIVE 12% for that same account, you’ll net a decrease in account value of 15%. Should you have that scenario play out back to back one year to the next, you will lose money even though the market stayed flat in the overall 2-year period.

Since most retirees are looking at long term ranges, it’s not my goal to warn you about short term losses. But this point illustrates that it takes HUGE gains to recover from losses with a Variable Annuity than most people think. Think Safety and protect your principal from any losses as you head down the retirement path!

Then call our office today to schedule a time to talk with one of our Annuity Experts. There is no cost and no obligation for this service.

Warmest Personal Regards,


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